406Transfer not to impose greater liability etc

406 Transfer not to impose greater liability etc

406 Transfer not to impose greater liability etc

(1) The constituent documents adopted in the transfer must not—

(a) impose on the members of the new body who were members of the co-operative at the date of transfer any greater or different liability to contribute to the assets of the new body than the liability to which they were subject as members of the co-operative; or

(b) deprive a member of the new body of preferential rights to dividends or capital to which the member was entitled as a member of the co-operative at the date of transfer.

(2) The transfer must result in all persons who were members of the co-operative at the date of transfer becoming members of the new body.

(3) In the case of a transfer of a co-operative having share capital to a new body having share capital, the transfer must result in every member of the co-operative at the date of transfer who held shares in the co-operative being the holder of shares in the capital of the new body equal in number and nominal value to the shares held by the member as a member of the co-operative.

Note—

Section 168 (1) provides that “Even though a person’s shares in a co-operative have been forfeited under [Part 2.6], the person is to be taken to be the holder of shares in the co-operative (the same in all respects as those that were forfeited) for the following purposes: […] (b) the entitlement of a shareholder when the co-operative becomes registered as a company if the relevant special resolution under section 404 is passed within 2 years after the person’s shares were forfeited”.